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Apple Sapphire Glass Supplier GT Advanced Files For Bankruptcy
mrspoonsi writes GT Advanced Technologies is filing for bankruptcy. In an announcement on Monday, GT Advanced, which makes sapphire displays that many investors hoped would be in Apple's newest iPhone, said that it was filing for Chapter 11 bankruptcy. In early September, shares of GT Advanced got crushed after the company's sapphire displays were not in the latest version of Apple's iPhone 6 and 6 Plus. GT Advanced, however, signed a multi-year agreement with Apple last November to supply the company with sapphire material. That agreement included a $578 million prepayment, which GT Advanced is set to repay Apple over a five-year period starting in 2015.
get a $578M prepayment and go bankrupt in 10 months?
http://media1.onsugar.com/files/2013/06/17/777/n/1922283/4b335bba7661873b_make_it_rain.xxxlarge.gif
I don't know that this is what happened, but it seems likely.
1) Apple wants to use sapphire for main glass in Iphone.
2) Apple signs contract with GTAT to supply the sapphire, including a pile of money to build sapphire production facilities.
3) Apple pushes all risk onto GTAT. IOW, if Apple decides not to use the sapphire for the displays, GTAT has to repay the pile of money from step 2.
4) Apple does not use sapphire. GTAT can't repay money because they already spent it building sapphire production lines which no have no demand.
5) GTAT declares bankruptcy.
My condolences to the engineers that were expected to perform miracles at the whims of their bosses.
Everyone was wondering why Apple didn't use sapphire for the iPhone 6 models. Maybe Apple determined that GT could not supply enough sapphire. I think sapphire is used for the Apple watch will require much less material.
Well, there's spam egg sausage and spam, that's not got much spam in it.
So which is it? Did Apple get GTAT's hopes up on using sapphire displays, sends them money, then decides they aren't going that route anymore leaving GTAT with facilities that have no use? Did GTAT have to invest some of its own money to get the production rolling on the sapphire screens, presumably because Apple's near 600 million isn't nearly enough? So is this why they are filing Chapt. 11? Or did GTAT burn to all that cash, only to have nothing to show for it and pissing off Apple in the process?
to a Luddite way of doing things. Clearly we will be 3D printing these things at home anyways. Who needs factories and materials specialists??
Well itsounds like they need to develop better glass. Sell itself to microsoft to be used on windows phones
It might be important to consider that a company filling for chapter 11 bankruptcy protection is not terribly uncommon. The company has no plans to shut down, nor liquidate assets. Ch. 11 is all about restructuring debt so that they can pay off the creditors and return to normal operating procedures. Most people in this thread are treating this like a Ch. 7 which it is not. In fact the difference between the two are so stark that many smart investors will buy into companies that have good prospects and a plan in Ch. 11. It can make a company much much stronger on the back end.
Less a 15% restocking fee, of course.
So is this GT the same glass we saw in the youtube video of the glass the guy bends almost 180 degrees without it breaking, and scribbles the sharp end of his knife all over and nothing bad happens to it?
Bankruptcy =/= going out of business. It means they're broke and need government help to fix it.
We've got all this capacity and technology but, you know, Tim, we could use a little extra grease to keep things moving while you ramp up for the next device rollout, if you catch my meaning. I'd hate for all of this to get mired in the courts and for you to miss a crucial delivery date on a ctrical component in your pretty toys...
Is it just my observation, or are there way too many stupid people in the world?
An old song comes to mind..
'C'mon - take the money and run. WOO HOO HOO.'
Fuck everything, we're doing diamond glass!
the preceding comment is my own and in no way reflects the opinion of the Joint Chiefs of Staff
I work in BNCT research and some guys from GT advance have presented at a couple of recent conferences. Of interest to us was their 'hyperion' (yes, like Borderlands) accelerator they'd been developing. Huge amounts of beam current from a fairly compact and easily maintained package. They were planning on using it to peel off very thin layers of sapphire via ion implantation, we could use it as the first stage of a neutron generator and I'm sure there are tons of other industrial applications. The senior guys I met seemed very good - proper engineers with the minimum of marketing bullshit. I think they'll do ok even if this is a pretty major set back.
"Physics is to math as sex is to masturbation." -R. Feynman
Tons of cheap sapphire plates available?
I could think of a few uses.
"If any question why we died, Tell them because our fathers lied."
It seems most likely either:
a) Their contract said that if Apple backed out by date X, GT has to pay back $Y.
b) More likely: GT was going to be a little late on delivering, or would deliver something not quite to spec.
> If I were to pay you $100 to build.. I don't know, a SIX FOOT kitchen table for me, and right as it comes time for you to deliver the table to me, I go "nope, that table is 5.99 feet", do you have to pay me back that $100?
I would not want to own a parts supplier in these times.
It's ok to be a parts supplier but you may not want to be a Tier 1 parts supplier to a large company. When you do that much business with a single enormous company you are pretty much their bitch and there isn't much you can do about it. The product volume when dealing directly with big companies is hard to resist but can bankrupt you if you aren't careful.
One of the big problems you didn't note about dealing with big automotive companies is that they seem to have never heard of the bullwhip effect. My company supplies GM (we're tier 3) and they are CONSTANTLY screwing around with their demand forecasts. We have a part that we supply to them that has a 4 month lead time (picked over alterntives with no lead time by some dumb ass engineer) and I assure you we do not get 4 months of schedule visibility. So we have to place big orders and hope we don't get whipsawed by changes in demand 3 months later.
last quarterly financial numbers. Note the -62% margins. Uh oh. The press release has lots of happy talk, but the numbers don't back it. ("GAAP" here means Generally Accepted Accounting Principles. Those are conservative assumptions. "Non-GAAP" numbers are numbers adjusted based on management's exclusion of certain negative items. They're usually flaky.)
The company was profitable at the beginning of 2013. They should have turned down the Apple deal. It's not good to have one big customer.
6) Apple takes ownership of GTAT because they are the largest creditor
7) GTAT gets sapphire working for the next iPhone
8) Apple keeps all the profits and locks out competitors
?
Apple let rumor slip they were gonna use Sapphire Glass and signed a contract for xxx amount in prepayment. They decide not to use the glass and now the stock which rocketed up now tanks so company files for bankruptcy. So now Apple pretty much owns the company for a lot less then what they would had top pay? Something to think about that this could been an Apple ploy to take the company over for a ton less then what would of?
... when you hinge the success of your entire company on going after on enormous account. GT had to spend itself into oblivion to build the capacity to provide glass for iPhone 6, borrowing millions for capital.
Then, of course, it all came crashing down, and there isn't enough sapphire business to support what they spent.
My company makes a part that could have been used in iPhone, but we're small, and when Apple came knocking, we didn't answer the door.
The bullshit baseless Apple rumors have real-world consequences. However, the people that spread them are not touched by those consequences so they will keep making shit up.
Apple will now buy them and proceed to sue every single carbon based life form on earth that uses 'glass'.
Wouldn't it be funny if Google bought the company just to screw Apple? I mean they have a multi-year agreement in place so that would be a few years of thumb in the eye like fun. Oh, I can dream...
The cynic in me thinks Apple will end up with the IP at the end of this.
Idiotic summary. Sapphire is a crystal, which by definition is the opposite of an amorphous substance such as a glass. Note that the press release from GT doesn't use the word "glass" even once--it would be like an appliance company calling their refrigerator an oven. They're both appliances, after all, right? (I'm pre-empting the "sapphire and glass are both usually transparent solids, right?" here.)
"Politicians and diapers must be changed often, and for the same reason."
Yes, the Bush Admin looked at Solyndra... as part of a larger "clean energy" program. The analysis by career people at DOE (who are SUPPOSED to be nan-partisan) however was that the Solyndra part of the program was a bad idea and they did not approve it while Bush was in office.
Now, there are some Bushies who try to pretend that Bush was a super-wise guy who stopped it (a bit of a stretch, though most presidents and their most-loyal supporters like to claim credit for anything the bureaucracy does on their watch).
There are Obama supporters, like the progrsssives at politifact and media matters who do their best to try to shift it all onto Bush as though Obama had nothing to do with it at all (and we should just forget all those White House visits, the campaign contributions and the speeches and personal appearances by administration officials). Most liberal attempts to blame this all on Bush very cleverly avoid certain details and conflate things in the hope that the average reader will dig no deeper. Sorry, but people with ends-justify-the-means "progressive" politics need to be watched with a VERY careful eye. For example, they will say "Bush signed the law!" (but the law was NOT solyndra-specific... the people who took specific action to ram-through the loan guarantees were Obama people who just happened to be having lots of meetings with the Solyndra investors who had contributed to Obama's campaign and whould lose lots of money without the guarantees. When the taxpayers were illegally left holding the bag while the Obama supporters bailed-out with the cash, this was entirely done by Team Obama and the guy they installed at DOE.
There are people in both parties with dirty hands on the Solyndra deal BUT to verry different degrees; The Bushies laid the groundwork but then failed to follow through. Team Obama followed through with great pomp and circumstance and serious effort, provided the money, bragged about it, attacked Republicans for being too-short-sighted and wedded to "big oil" etc......... and then flipped completely 180 and started blaming it all on Bush when it collapsed and the taxpayers found out. Shameful.
If GT does not make the sapphire screens for Apple displays, then who does?